For some weird reason, I get the feeling that the "deep recession" is not going to be as deep as they are purporting and instead, the central banks are going to massively increase interest rates in the short term, not to smash inflation, but smash the equity markets instead. While people panic sell in order to batten down for a long bear market, they will soon reverse the direction and drive the prices up, making all those who dropped out, chase at a higher rate than they sold.
This is definitely not financial advice, just a feeling.
For example, after so many people extended their house loans to the maximum due to the cheap debt and willingness of banks to extend, a sharp period of overinflated interest rates will drive many out of the markets again, but it will not really affect much in the top echelons of financial society, because they have the reserves available. It is all those people who were encouraged to FOMO in, otherwise they might never get the opportunity to own a home, because prices will keep going up that are going to lose their houses. And those who do really have the means, will be able to swoop in and pick up some very good deals, just before they get driven up in value again.
Just a hunch.
As always, whether the markets are going up or down, those who are able to hold and expand are the ones who are going to benefit. On the way down, they extend their holdings, on the way up they keep holding until they are ready to sell and then the dump excesses down to where they are comfortable holding again and then, start to look for a buyback point to do it again.
Rinse and repeat. Over and over. For decades.
As they say, traders need patience and in these cycles, they can be many years apart, so they have to learn to bide their time, something that doesn't come naturally to us as humans. Most of us at least, are built as instant gratifiers and this combined with our base reactions to fears, becomes a highly a leverageable combination.
FOMO combined with FUD - it is financially lethal.
But, if you have no immediate need for a positive financial outcome and have the reserves to absorb a negative market, the FOMO and FUD need have little impact on decision making, so the horizon for a positive result can be pushed out further and, the cost averaging needn't be quite as precise, because in the future, it will all be fine.
For example, someone who bought BTC at 20, held it up to 67 and then are still holding might be lamenting their decisions, but at the end of the day, if the goal is to sell at 100 for a 5x gain, an extra few years doesn't matter -if they don't need that value in the next few years. And, if they don't need that value now, they probably have other pools of resources around, so even if the price of BTC drops to 10, they can buy more and get a 10x gain on that portion, when they eventually sell at the 100 marker - two years or ten doesn't matter, they are making money on other things in the meantime anyway.
And I think this is why the advice of "multiple revenue streams" is so sound, as if they are spread well enough and are actually incoming streams and not just holdings, they can either be used to increase holdings, or in the downturns, used to not need to spend holdings. And even if the income is lower in the downturns, as long as there is some left over, what can be bought is also riding low, so the same volume can be accomplished.
Sure, at some point the purchasing power of "real world items" has to be considered, but a lot of the time, the only thing that actually matters is the volume of holdings of assets that are going to survive the market cycles. Being able to increase in those assets is the goal, so that when the upward drive comes, they are compounded in value and can be trimmed back for the rinse and repeat.
As said, this is just a hunch and I don't think there are going to be any all time highs this year, but I do believe that the extreme fear mongering is already at such a level, that it is going to shake a lot loose from the weak hands in every investment sector so fast, that there will be no need to prolong the pressure for too long.
The aggressive rate hikes could be explained by the US elections in November in order to crush inflation fast and then give a month or two of reversal to give a chance of reelection, by feigning competence. This means that after crushing the markets heavily, there can be positive signs for the future as they start to recover, and all that time, the same tiny investor group has been buying the shorter than publicized dip.
But - it could also be a three year long bear where the price of Bitcoin hits 1000, Eth goes to 30 dollars and Hive to 3 cents...
Regardless what the markets do - those who are buying the dips, are those who will be reaping the peaks.
Taraz
[ Gen1: Hive ]